ALAMEDA — Space is tight at Alameda Bicycle, a lively little bike shop on a busy corner of Park Street and Webb Avenue.

Pink beach cruisers spill out into the small parking lot, taking up choice parking spaces that will grow even scarcer when the cycling store expands.

Gene Oh, whose family has owned the bike shop since 1987, says the growing business needs to expand to compete with cycling superstores that have opened in San Francisco and other spots around the Bay Area.

But to expand, Oh was told he needed to provide five additional parking spaces for cars — as required by city ordinance — or pay costly “in-lieu” fees.

Either option would have cost the bike shop more than $25,000.

But thanks to a compromise the Alameda Planning Board accepted, the family-run shop will be allowed to expand by providing public bike racks on Park Street instead of asphalt parking spaces.

“These guys do not have that kind of cash and capital available to them,” said Rob Ratto, president of the Park Street Business Association, who spoke on behalf of the bike store that has been at the corner since 1969. Oh’s parents, Jarrell and Choong Jung, purchased it in 1987.

Ratto said the parking ordinance has been hurting small local businesses by hindering their growth as they attempt to compete with big companies.

Facing that dilemma, the Jungs agreed to place a couple of racks on Park Street to accommodate roughly 12 bicycles and at least three racks elsewhere on the property for employees.

The Planning Board unanimously approved the plan Monday, paving the way for the bike shop to double its sales floor and expand its repair and service area by a total of 800 square feet.

Supergo Bike Shops, a Santa Monica-based chain that calls itself “the biggest bike shop around,” opened in Mountain View in April, and Pacific Bicycle Inc. of San Francisco consolidated 13 small stores into two superstores last year.

Alameda Bicycle has grown steadily in the past five years, now doing about $1 million in sales annually, Oh said.

His strategy has been to become a “mature shop,” appealing to repeat customers with a solid selection of cycling accessories and repair services.

He concedes that he will probably lose some customers to the big stores despite the expansion scheduled for October. But the new space will put more bikes and accessories on the sales floor and give the shop’s service guys more elbow room in the back.

“There’s a lot of people in Alameda who want to shop locally,” he said. “We just want to give them that ability.”

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